-Adam Smith’s argument that government intervention in the free play of the market restricted economic forces, which if left to them would increase productivity and prosperity
-Became a dogma of liberalism
-David Ricardo in his Principles of Political Economy and Taxation (1817), liberal theory became the core of modern economics
-Influence lay in presenting economics like a science
-Wealth of the community comes from land, capital and labor and these three classes are compensated by rent, profit, and wages
-Product’s value results from the labor required to make it
-Called the Labor theory of value
-Labor saving as the source of profit
-Value of land or work was determined not by individual decisions but by economic laws
-Poorest land in cultivation simply sustains those who work it but the most fertile land produces more for the same labor, and that increment constitutes profit, paid to the landlord in rent
-Rate of pay is set by an “iron law of wages”
-Labor is plentiful, the workers tend to be paid at the substinence level
-Both land and labor are commodities, their value unaffected by any virtues of rural life
-Society is a collection of competing interests
-Legislation cannot raise wages or prevent the marketplace from working in its natural way
-Became a dogma of liberalism
-David Ricardo in his Principles of Political Economy and Taxation (1817), liberal theory became the core of modern economics
-Influence lay in presenting economics like a science
-Wealth of the community comes from land, capital and labor and these three classes are compensated by rent, profit, and wages
-Product’s value results from the labor required to make it
-Called the Labor theory of value
-Labor saving as the source of profit
-Value of land or work was determined not by individual decisions but by economic laws
-Poorest land in cultivation simply sustains those who work it but the most fertile land produces more for the same labor, and that increment constitutes profit, paid to the landlord in rent
-Rate of pay is set by an “iron law of wages”
-Labor is plentiful, the workers tend to be paid at the substinence level
-Both land and labor are commodities, their value unaffected by any virtues of rural life
-Society is a collection of competing interests
-Legislation cannot raise wages or prevent the marketplace from working in its natural way